The following United States Patents describe various types of computer based systems regarding insurance data: U.S. Pat. Nos. 5,479,344 (Keziah, Jr.); 5,523,942 (Tyler et al.); 4,831,526 (Lucas et al.); 4,975,840 (DeTore et al.); 5,504,674 (Chen et al.); 4,837,693 (Schotz); 4,899,292 (Montagna et al.); and 5,550,746 (Jacobs).
The Keziah, Jr. patent discloses an apparatus for receiving insurance data and for displaying life insurance needs in numerical format.
The Tyler et al. patent discloses a computer implemented graphical user interface for receiving instructions and information relating to insurance. The displays use conventional Window format for entering and displaying numerical data in tabular form.
The Luchs et al. patent discloses a computer system for processing and preparing applications for insurance and premium quotations and for preparing and writing insurance contracts. The displays utilize line displays.
The DeTore et al. patent discloses a method and apparatus for evaluating the insurability of a potentially insurable risk.
The Chen et al. patent discloses a communications network for processing insurance claims of objects.
The Schotz patent discloses a system including a group of computers for facilitating the implementation and administration of a desired group insurance plan.
The Montagna et al. patent discloses a system for storing and retrieving text and associate graphics for insurance estimation or service manuals.
The Jacobs patent discloses a method and apparatus for storing and selectively retrieving product data by correlating customer selection criteria with optimum product designs based on embedded expert judgments.
It should be understood from the outset that the use of the term "illustration" is a term of art describing any numeric, or graphic, interpretation and projection of assumptions of the future values of a life insurance policy.
Two types of illustration software exist on the marketplace. (1) product illustrations and 2) concept illustration software. Both are static, number, time and paper intensive systems.
Current product software calculates policy values and creates a ledger of numbers (generally from 6 to 20 pages in length) which illustrate what a specific insurance company's policy values may look like in the future under a static set of economic assumptions (including Premiums paid in, Interest credited to the policy, Mortality charges, Selling expenses, General expenses, Lapse Rates). Although these illustrations contain footnotes which state that the policy has many "non-guaranteed" assumptions most of the company's specific assumptions are not disclosed to the reader. Thus, it is impossible for the policy buyer to fully understand what the term "non-guaranteed" may mean as it might effect his future policy values.
Using an input screen on a PC or mainframe computer an agent or home office can enter policy input data to create one illustration at a time. The ledger and possibly a graph may be created illustrating this one set of assumptions. If a second set of assumptions is to be considered the input data must be changed or reentered and the ledger pages and graph reprinted. The output of dozens of pages of numbers and or a few graphs can be laid side by side to compare these two possible outcomes. In most cases agents will summarize this data and create a new summary of values to discuss with his client.
The problem with this approach is that it is labor, time and paper intensive and can only cover a very few alternatives. The result is a policy design and buying decision based on a limited number of alternatives considered.
The second type of illustration system in the market transfers the primary illustration data created above, inside the computer to a new platform to illustrate a sales concept rather than a policy per se. This generally requires some type of transfer of data from the main illustration system to a second system where it can be formatted into a variety of sales concepts. All these systems generate a single ledger and series of static graphs which can be used with a client. (Most of these systems also require the printing and delivery to client of all the pages from the basic illustration and footnotes mentioned above.)
The following companies sell software programs that fall in the above categories and which calculate life insurance policy data, print out numbered illustrations and/or present static graphic depictions: Fipsco of Des Moines, Ill.; United Systems of Park City, Utah (INTEFLEX); FDP of Miami, Fla.; and Insmark of San Ramon, Calif.
Thus, there remains a need for a system that allows the user to rapidly vary assumptions and view a dynamic illustration of future values of an insurance policy. In addition, there remains a need for a system that creates a model policy based on industry standards instead of being based on a single company's internal assumptions. Furthermore, although the investment industry has created some tools in the form of questionnaires that attempt to establish a client's risk tolerance and investment objectives (e.g., there are a number of asset allocation software systems in use today that allow the user to answer a series of questions on a computer with the computer displaying a recommended allocation among a group of investment accounts such as the Provident Mutual Asset Allocation package designed for variable life insurance), there appears to be nothing equivalent for decision-making about life insurance policies.